RPower Share Price Plunges Amid Sebi Order, Stock Down 14% From High

The shares of Reliance Power Ltd (RPower) have dropped significantly, falling by over 14% from their recent 52-week high of Rs 38.07. On Monday, the stock hit its lower circuit limit of Rs 32.73, marking a 5% decline for the second straight session. This downward movement comes amid concerns over a Sebi order involving Anil D Ambani and other entities associated with Reliance Home Finance.

Sebi Restricts Anil Ambani: Market Reacts

The stock market selloff was triggered after Sebi barred industrialist Anil Ambani and 24 others from the securities market for five years. The regulatory body also imposed a Rs 25 crore penalty on Ambani for his role in the alleged diversion of funds from Reliance Home Finance Ltd. Alongside this, Ambani has been prohibited from serving as a director or key managerial personnel (KMP) in any listed company for the duration of the ban.

In response, Reliance Power swiftly issued a clarification, stating that it was not involved in the Sebi proceedings. "Reliance Power Ltd was not a noticee or party to the proceedings before Sebi... No directions are given in the Order against Reliance Power Ltd," the company explained in a statement. Furthermore, Anil Ambani’s resignation from the board of Reliance Power in February 2022 means that the company’s operations remain unaffected by the recent Sebi order.

RPower’s Stock Performance: What’s Next?

The stock has shown significant volatility following the Sebi order. Technical analysts believe that RPower may find support at Rs 30.50, with potential resistance seen near Rs 38. This price movement reflects a mix of investor concerns about regulatory headwinds and optimism about the company’s long-term prospects.

According to Jigar S Patel, Senior Manager - Technical Research Analyst at Anand Rathi Shares and Stock Brokers, the stock is likely to trade in the Rs 30-40 range in the short term. However, a decisive move below Rs 28.50 could signal further weakness in the stock’s price.

Osho Krishan, Senior Research Analyst at Angel One, added, “The stock's trading patterns suggest support zones between Rs 32 and Rs 30, with resistance building up near Rs 42-45 levels."

Recent Financial Improvements Provide Optimism

Amid this market volatility, Reliance Power has demonstrated improvements in its financial performance. The company’s net loss for Q1 FY25 narrowed to Rs 97.85 crore, a significant improvement from the Rs 296.31 crore loss posted in the corresponding quarter of the previous year. Additionally, total income grew to Rs 2,069.18 crore, indicating better operational efficiencies and growth potential.

Despite the current market correction, analysts believe that RPower’s improving financial health could provide a cushion for the stock in the longer term. Technical indicators also suggest a neutral market stance, with the 14-day relative strength index (RSI) at 52.99, reflecting neither an overbought nor oversold position.

Conclusion: Will RPower Rebound?

While the immediate outlook for RPower remains cautious due to the Sebi ruling, the company's improved financials and strong support at Rs 30 could offer a potential rebound. Investors will likely keep a close eye on further developments related to the Sebi case and any strategic moves from the company to restore market confidence.